CONDUCT AND CAPABILITY POLICY

CONDUCT AND CAPABILITY POLICY 1. SCOPE AND AIM The Conduct and Capability Policy applies to all colleagues in Kelda Group Ltd and its wholly owned group companies in the UK, including Yorkshire Water Services, Keyland Developments, Loop and Kelda Water Services which includes KWS Alpha, KWS Defence and KWS Grampian. People play a vital part in the success of our business. This Policy has been developed to ensure that there is a strong management framework and key principles to support people at work. The purpose of the policy is to allow managers to deal effectively with colleagues when their conduct, performance or attendance falls below acceptable standards. It provides an infrastructure of guidance and rules in which people can operate effectively, and should ensure that the organisation will comply with the relevant employment law. Through close partnership with its people and Trade Unions, the organisation will endeavour to meet its responsibility to provide clear direction and a safe, supportive environment in which colleagues can utilise their skills and abilities to drive the business forward. 2. OVERVIEW Capability covers the areas where an individual becomes incapable of carrying out their duties due to either unsatisfactory work performance or incapacity due to sickness absence whereas Conduct covers misconduct issues, for example: poor timekeeping, breach of Company rules or theft. It is the responsibility of management to initially select and then provide each employee with the appropriate induction, training, guidance, support and coaching in order to do their jobs to the best of their capabilities, within the opportunities arising. There is a clear responsibility on everyone to ensure an environment that is safe from harm of both a physical and psychological nature. We should also respect the diversity that people bring to the job by recognising that differences in cultures, perceptions, experience etc. all combine to enrich the working operation. Management will rigorously ensure that employees operate in an environment free from bias, discrimination, harassment and bullying, where opportunities and standards are the same for all. It is also the responsibility of all employees to ensure that they meet the company requirements for a competent workforce by ensuring that they accept guidance and training through the formal and informal processes available to them. All employees should take full responsibility for their own conduct, professionalism and personal development and in doing so, take feedback and guidance in the spirit of continuing improvement. 3. HOW TO USE THIS POLICY This overall Conduct and Capability policy includes three separate procedures; discipline, sickness absence and performance improvement. Whilst they share a similar approach and principles, it is important to understand that they are not interchangeable. Whilst some issues may appear to be similar it is not possible to move from one stage in one to the next stage in another. It may be, however, that more than one process is being applied to an individual at the same time. 1

For issues of misconduct the disciplinary policy (Part 1) should be followed. Examples of misconduct are; continued lateness, failure to follow management instruction, abuse of the company computer systems, negligence, unauthorised absence, theft and inappropriate behaviour. Where the issue involves absence through illness then the sickness absence policy (Part 2) should be followed. In these instances an employee should be dealt with sympathetically and offered support. However, unacceptable levels will still be managed through a formal procedure. Finally when the issue involves the individuals performance, in particular their capability to perform the role, then the performance improvement policy (Part 3) should be followed. 3.1 Previous Procedures The procedures set out in this document are effective from 1 July 2004 and were amended on 1 st June 2008. These procedures replace all previous disciplinary and absence management policies including version 1 of the Conduct and Capability Policy which was effective between 1 October 2002 and 30 June 2004. 4. PRINCIPLES The overall principles to be adopted are as follows:- Conduct and capability matters will be handled consistently, fairly, without discrimination and with careful consideration being given to the individual circumstances in each case. At all stages in the process those involved will respect the confidentiality of the issues and people involved. Any formal action will only be taken by a person with the appropriate authority. The immediate manager or the manager at the next level upwards will normally carry out first/second stage warnings or review meetings. More serious decisions i.e.: final written warning and dismissal will normally be heard by a more senior manager than the investigatory manager, but in any case, the manager holding the disciplinary hearing must not have been involved in the investigatory stage. An employee will have the right to appeal against any formal action taken against them. Employees may be represented or accompanied at formal investigatory or disciplinary meetings with management by a trade union representative or fellow employee at any stage of the procedures. Employees will be advised of this right and it is their responsibility to make any necessary arrangements. Further principles will apply to individual sections of this policy. 2

PART 1 - DISCIPLINARY Index Section 1 Disciplinary Policy 4 1.1 Introduction 4 1.2 Disciplinary principles 4 Section 2 Disciplinary Procedure 6 2.1 Investigation 6 2.2 Precautionary suspension 6 2.3 Disciplinary hearing 7 2.4 Disciplinary outcomes 8 2.4.1 No action 8 2.4.2 First stage warning 8 2.4.3 Second stage warning 9 2.4.4 Final written warning 9 2.4.5 Dismissal 9 2.5 Expired warnings 10 2.6 Redeployment 10 2.7 Appeals against disciplinary action 10 2.8 Effective date of termination 11 2.9 Pay for performance 11 2.10 Gross misconduct 12 2.11 Role of person accompanying at the hearing 13 2.12 Records of the meeting 13 2.13 Grievance / claims of harassment 14 2.14 Sickness absence 14 2.15 Flowchart of disciplinary procedure 15 3

SECTION 1 - DISCIPLINARY POLICY 1.1 Introduction The success of the business depends on all colleagues operating together in an environment:- which features good working relationships; where our Values and Behaviours are consistently demonstrated; which values service to customers and; within which people demonstrate commitment, competence and application to the organisation. All managers have a continuing day to day responsibility to give colleagues feedback about their behaviour and to counsel them about any difficulties, with the aim of seeking improvements without the need to use the disciplinary procedure. However, there may be occasions when due to the seriousness of the issues, or the repeated/persistent nature of the behaviour, disciplinary procedures must be followed. The Company believes that having responsible, contributing, and committed employees negates the need for a long and detailed set of disciplinary rules. There may however be specific rules in documents appropriate to particular work activities such as Codes of Practice, Safe Working Procedures and Drivers' Handbooks that are mandatory and which managers should bring to the attention of individuals in their team. If individuals have any doubt about what is, or is not, acceptable, in terms of work performance or behaviour they should discuss this with their manager to avoid any misunderstandings. 1.2 Disciplinary Principles The Disciplinary Policy applies to all colleagues in Kelda Group plc and its wholly owned group companies in the UK. It has been developed following consultation with our recognised Trade Unions. Further consultation will take place should any amendments be made to this policy. It is expected that the following principles will apply in all cases: Disciplinary matters will be handled consistently, fairly, without discrimination and with careful consideration being given to the individual circumstances in each case. No individual will normally be dismissed for a first breach of discipline, other than for cases of gross misconduct. As early in the investigation as possible, the employee will be made aware of the alleged misconduct. At each stage thereafter (i.e. when invited to attend a formal meeting), the employee will be informed in writing of the procedure including their right to representation. Employees who are invited to a Disciplinary Hearing will receive notification in writing, stating the allegations and purpose of the hearing. Individuals will normally 4

be given at least 2 days notice of any disciplinary hearings. This notice can be waived in appropriate circumstances, by mutual agreement of both parties. At all stages in the process those involved will respect the confidentiality of the issues and people involved. An employee will have the right to appeal against any disciplinary action. A manager taking disciplinary action must have the relevant authority from their respective Head of Department to award the penalty imposed. These levels of authority will be agreed between the relevant HR Manager and the Head of Department and will be reviewed from time to time to ensure they are appropriate. All formal meetings will be organised at a reasonable time when all parties concerned are available. If an employee is unable or fails to attend a formal meeting that has been communicated to them, after re-arranging the hearing once, it is for the disciplinary or investigation manager to consider in the circumstances if it is reasonable to continue in their absence. Any appeal hearing will be heard by a more Senior Manager than the Manager who awarded the original disciplinary outcome. However, in exceptional circumstances (e.g. due to holidays or previous business commitments) appeals may be heard by a Manager at the same level as long as he/she has had no previous involvement in the case. Employees may be represented or accompanied at formal investigatory or disciplinary meetings with management by a trade union representative or fellow employee. Employees will be advised of this right and it is their responsibility to make any necessary arrangements. Recording devices of any nature will not be permitted in meetings, unless prior permission has been expressly given by the disciplinary manager in conjunction with the Employee Relations Manager. Without such permission, covertly recording a meeting or an adjournment is a disciplinary matter and will be dealt with accordingly. If disciplinary action is being taken against a Trade Union Representative, the full circumstances of the case should first be discussed in confidence with the relevant Full Time Trade Union Officer. The time limits referred to in the process may be varied by joint agreement. Following a breach or suspected breach of the Information Security Policy, the incident will be investigated in accordance with the Conduct and Capability Procedure. The Human Resources Manager/ Human Resources will notify the Information Security Manager of any investigations taking place The ACAS Code of Practice on Discipline and Grievance came into force on 6 April 2009 and represents a minimum standard of practice which must be followed by all employers. The Conduct & Capability Policy incorporates ACAS s code of practice and goes beyond the minimum standard of practice. A Tribunal will determine whether a dismissal is fair by reference to ACAS Code provisions and the company s procedure. Failure to follow company procedure could lead to a Tribunal ruling a dismissal as unfair, even if the failure would have made no difference to the decision to dismiss. 5

SECTION 2 - DISCIPLINARY PROCEDURE 2.1 Investigation For the disciplinary procedure to be invoked, a manager must have reasonable grounds to believe that alleged misconduct has taken place. As such there is a need to establish the facts before disciplinary action is taken. This should be done through an investigation that should be conducted promptly and comprehensively. The investigating manager must remain impartial and record everything during the course of his/her investigations. As part of the investigation the employee will be required to attend a formal fact find meeting in order to explore the allegations. In such cases it should be made clear to the employee that this is a preliminary investigatory interview and not a formal disciplinary hearing. The employee should be made aware of their right to representation. Once the investigating manager has exhausted the fact-finding process and given the employee the opportunity to explain the alleged misconduct, he or she must decide whether the issue is a disciplinary matter. It is for the manager to decide whether they believe there is a case to answer. In cases where the evidence is limited or inconclusive, this should not itself prevent the matter proceeding to a disciplinary hearing. The key question for managers to answer is; on the face of the facts available, could the alleged misconduct conduct have taken place. Only, if the answer is yes, should the case proceed to a disciplinary hearing. It is for the disciplinary hearing to establish if the misconduct did take place on the balance of probabilities. If all parties are in agreement, the investigating manager may subsequently hold the disciplinary hearing but will be limited to issuing a first stage warning or second stage warning. However, if an individual has reasonable grounds to believe that they won t be treated fairly and objectively by the investigating manager, they have the option before the hearing commences to request that an independent manager undertakes the disciplinary hearing. If a request is made HR will allocate an alternative manager who has had no previous involvement in the investigation. More serious cases should be referred to another manager to conduct the disciplinary hearing. This would normally be a more senior manager than the investigatory manager. In any event, (for more serious cases) the manager holding the formal disciplinary hearing should not have been involved in the investigatory stage. Even in cases of admitted misconduct, the formal disciplinary process must be followed with referral to a formal disciplinary hearing. 2.2 Precautionary Suspension An employee may be placed on precautionary suspension with full pay at any point during the investigation process. Before suspending an employee, careful and full consideration must be given to the specific circumstances of the case. Suspension can be considered in the following circumstances: When the allegations are for gross misconduct. Where an employee was incapable of performing their duties. For example, under the apparent influence of alcohol or drugs. When a continued presence at work could be prejudicial / detrimental to the health & safety of the employee or to the health & safety of others. Where the presence of the colleague could prejudice the fact-finding investigation 6

Where the misconduct places others at risk, e.g. cases of bullying or violence. Where continuation at work could be detrimental to the company or relations with employees, customers or suppliers. The employee should be advised verbally and then in writing of the suspension. The letter should detail any restrictions or obligations required of the individual during the period of suspension. The period an employee is placed on suspension should be kept to a minimum and should be regularly reviewed. The employee should be advised of time-scales. It should also be made clear to the employee that suspension is a precautionary step, not a disciplinary outcome and is not an inference of guilt. In some instances, it may be appropriate for the suspension to be kept in place until a decision has been made following a disciplinary hearing. It is important to maintain contact with a suspended employee. They will need support throughout the process. This improves the chances of maintaining good relationships if and when they return to work. 2.3 Disciplinary Hearing Prior to the disciplinary hearing the employee should be informed in writing of the allegations against them and provided with a copy of the disciplinary policy at least 2 days before the hearing. The invitation should also confirm the individual s right to representation. Any evidence to be used in the disciplinary hearing must be made available to the employee and their representative in advance of the hearing or reconvened hearing. Alternatively an adjournment of sufficient length should be given during the disciplinary hearing for the employee and their representative to review the evidence. In addition, if the employee concerned has any evidence or information which is to be presented at the hearing, it must be made available in advance of the hearing or reconvened hearing to the manager hearing the case. Alternatively, an adjournment will be taken during the hearing to review the new evidence. There may be occasions where it seems natural and timely to move straight to a disciplinary hearing after the investigatory interview (e.g. in less serious cases). If both parties agree to waive the minimum 2 days notice period, then the hearing may go ahead provided that written notice of the hearing, with details of the allegations, is given before the hearing commences. An employee who cannot attend a scheduled hearing should inform the disciplinary manager in advance of the meeting. If the employee is unable or fails to attend a meeting, after rearranging the hearing once, it is for the disciplinary manager to decide, after careful consideration of the circumstances whether it is reasonable to continue in the individual s absence. For example, if the hearing is re-arranged and the employee refuses without reasonable grounds to attend the rescheduled hearing, the manager should proceed in their absence. In some circumstances where employees are unable to attend a disciplinary hearing e.g. ill health, they may nominate a third party to attend on their behalf (Trade Union Representative or fellow employee). In these circumstances employees should fully brief their representative prior to the hearing and also inform the disciplinary manager of the alternative arrangements. The disciplinary hearing must be held by a manager able to award a disciplinary outcome appropriate to the type of misconduct under investigation. (see 1.2 Disciplinary Principles). The disciplinary manager, where possible, should have HR or another manager present during the hearing. The role of the HR representative in these circumstances is to actively 7

support the manager during the proceedings. In addition, they will advise on procedure, assist in taking notes as requested and to advise the manager hearing the case on issues of fairness and consistency. In the absence of HR, the role of the supporting manager will be to witness and provide active support during the proceedings. Any party may request an adjournment during the disciplinary hearing. It is for the disciplinary manager to decide whether an adjournment is necessary or desirable, particularly if it is to enable further pertinent information to be gathered, additional witnesses to be questioned etc. The purpose and expected length of the adjournment should be made clear to all parties. The key responsibility of the manager hearing the case is to take into account all the information available to him/her at that time, to consider the reasonableness of the situation, and to make a fair decision on the balance of probability and taking into account any mitigating circumstances. At the hearing the employee will have the opportunity to put forward their case and respond to any allegations against them. Following the disciplinary hearing if it is decided that disciplinary action is appropriate then the company will apply whichever of the following levels of disciplinary measures it deems appropriate. This will depend on the severity of the misconduct and any mitigating factors that have been taken into account. 2.4 Disciplinary Outcomes Warnings issued for misconduct will be appropriate to the seriousness and nature of each case. Therefore, warnings for misconduct do not have to work chronologically through first stage, second stage etc. There will be occasions where individuals are awarded, for example, a second stage warning (even for a first offence) if the nature of the misconduct is serious enough to warrant a warning greater than a first stage. 2.4.1 No action Following a disciplinary hearing, the manager may decide that no action is necessary e.g. if the employee was unclear about what was expected from them and they agree to try and resolve the issue via additional support or counselling. Alternatively, the case may not be proven on the balance of probabilities. 2.4.2 First Stage Warning For a minor offence, a first stage warning may be given, making it clear that any further misconduct will render the employee liable to further disciplinary action involving more severe consequences. First stage warnings will normally be given by the immediate manager or the next level upwards. The warning must make clear the nature of the misconduct and any action required of the employee to remedy the matter, giving an appropriate time-scale over which the improvement is required. This must be confirmed in writing including an explanation of the appeal process. Generally, first stage warnings will be disregarded for disciplinary purposes after 6 months. Legitimate requests to gain access to conduct and capability records (in accordance with the provisions of the Data Protection Act) can be made to Kelda Payroll. 8

2.4.3 Second Stage Warning For more serious offences, or for the repetition of lesser offences, a second stage warning should be given, setting out the nature of the offence and warning that further misconduct is liable to result in further disciplinary action involving more severe consequences. Second stage warnings will normally be given by the immediate manager or the next level upwards. The warning must make clear the nature of the misconduct and any action required of the employee to remedy the matter, giving an appropriate time-scale over which the improvement is required. This must be confirmed in writing including an explanation of the appeal process. Second stage warnings will be disregarded for disciplinary purposes after 12 months. Legitimate requests to gain access to conduct and capability records (in accordance with the provisions of the Data Protection Act) can be made to Kelda Payroll. 2.4.4 Final Written Warning A final written warning is appropriate for serious misconduct, or misconduct which warrants dismissal but where the manager decides to mitigate the decision because of particular circumstances. It may also result from previous current unexpired disciplinary warning(s) without the employee improving to acceptable standards during the review period. A final written warning may also be awarded to an employee with less than 6 months continuous service even where no previous warnings have been given. A final written warning should only be issued by a Senior Manager with the relevant authority (or a nominee acting on their behalf) acting with the advice of an appropriate representative from the Human Resources Department. In any event, the manager holding the formal disciplinary hearing should not have been involved in the investigatory stage. Final written warnings will be disregarded for disciplinary purposes after 12 months. In exceptional circumstances where misconduct has been very serious and would normally lead to dismissal, it may be appropriate for the warning period to be extended beyond 12 months for a specified period. Legitimate requests to gain access to conduct and capability records (in accordance with the provisions of the Data Protection Act) can be made to Kelda Payroll. 2.4.5 Dismissal Summary dismissal (i.e. without notice) is appropriate in cases of gross misconduct or where there is a fundamental breach of trust between a manager and employee. Alternatively where no improvement takes place following the issue of a final written warning, dismissal with notice may be appropriate. Dismissal is an extremely serious step, and should be taken by a Senior Manager with dismissal authority (or a nominee acting on their behalf) acting with the advice of an appropriate representative from the Human Resources Department. In any event, the manager holding the formal disciplinary hearing should not have been involved in the investigatory stage. 9

2.5 Expired Warnings Previous expired warnings and records of discussions can only be taken into consideration at the investigatory and disciplinary stage if they are relevant to forming a belief, on the balance of probabilities, about whether misconduct has occurred. For example, a record of a meeting in which a manager informs an individual of the importance of the Company s IT Security Policy would be relevant in a subsequent case if the individual then denied any knowledge of the policy. If there is persistent misconduct of a similar nature over a protracted period, there may be circumstances where expired warnings may be taken into account when determining the appropriate level of any future disciplinary penalty. In cases where dismissal is a potential outcome, expired warnings should not be relied upon as contributing to the reason to dismiss but can be one of the factors to be taken into account, when deciding whether or not dismissal is reasonable in the circumstances, along with any mitigating factors raised by the employee. 2.6 Redeployment On occasions, an appropriate outcome may include the transferring of the individual to a different role, department or location depending on the case. This should be a comparable role in terms of status and benefits. Where a transfer takes place in conjunction with a first stage, second stage or final warning, then this should not be at the financial detriment of the individual in terms of basic salary and benefits package, in other words, Mark Time Pay and/or Maintained Pay would apply. Where redeployment is an alternative to dismissal, this may include a demotion i.e. to a role with a lower salary/benefits package. In this instance the disciplining manager should consider whether it is appropriate to implement any reduction in stages over a 12 month period, according to the circumstances of the case. The disciplinary manager may also issue or extend a final written warning where redeployment is an alternative to dismissal. 2.7 Appeals against Disciplinary Action Employees have the right to appeal against any disciplinary action. This should be explained in writing by the manager making the disciplinary decision, including details of who to address the appeal to. If they wish to exercise this right, the appeal must be registered in writing to the manager who will be hearing the appeal, within 7 calendar days of receiving the written notification of the disciplinary action, stating the grounds for the appeal. An appeal can be made on grounds of: perceived unfairness of the decision disputing the facts of the case including new evidence coming to light procedural non-compliance severity of the penalty awarded The ground(s) of appeal and facts relied upon in support should be clearly stated on the written appeal. The employee should be invited in writing to attend an appeal meeting, which will normally be held within 14 days of their notification of appeal being received. Employees should be notified of their right to representation and should be given at least 2 days written notification of the scheduled appeal hearing. Where an individual is unable to attend the scheduled hearing, the hearing should be rescheduled at least once before it is heard in their absence. If an individual refuses without reasonable grounds to attend a rescheduled hearing, the manager should proceed in their absence. 10

Where possible the manager hearing the appeal will be the manager of the person who made the original decision. However, there may be occasions when the organisation structure prevents this from happening. In such instances a senior manager from another part of the business may hear the appeal and every effort should be made to ensure that this manager (hearing the appeal) is more senior than the original disciplining manager, although it recognised that this may not always be practicable. The manager hearing the appeal should not have had any previous active involvement in the decision which is being appealed and should be supported by a representative from HR. At the appeal meeting the manager will consider the points on which the appeal is based, together with any supporting evidence provided by the employee and their representative. In addition, they may invite the manager who made the original decision to respond and put forward their case. The manager hearing the appeal may also request further investigations/evidence as they see fit in order to review the case. The manager hearing the appeal may uphold, withdraw or vary the disciplinary outcome. This does not include increasing the severity of the original outcome. The employee should be notified in writing of the appeal decision within 14 days and advised that there is no further right of appeal. 2.8 Effective Date of Termination. If an appeal against dismissal is unsuccessful the effective date of termination will be the original date of dismissal. If the appeal is upheld, the individual will be re-instated and their employment will be regarded as continuous. 2.9 Pay for Performance An employee who receives a disciplinary warning will be assessed as unsatisfactory conduct for the quarter the penalty is awarded and will therefore not receive a performance award for that quarter. Depending on the severity of the warning and any improvement in the individual s conduct, the individual may receive a performance award in the following quarter, at the manager s discretion. If it is decided that they are not to receive a performance bonus for more than one quarter, the assessment rating on MSS for each relevant quarter should be unsatisfactory conduct. There may occasionally be circumstances when an employee who is already undergoing formal or informal performance management is issued with a disciplinary warning for misconduct. In this situation, the individual s assessment rating will be unsatisfactory conduct on the performance management documentation, and on MSS. The manager should also note on the performance management documentation that there is an ongoing performance issue and make an assessment of the person s performance in addition to this. It is important to note that the performance management process will continue or commence alongside the disciplinary warning, and subsequent action may be taken under the performance management process if there is insufficient improvement in performance. A record of all performance and conduct discussions will be held on the employee s file. For example: Employee A has been with the company for 2 years. Six months ago, their manager identified issues with their performance and arranged support in the form of training, coaching and mentoring sessions. Unfortunately the individual is still not performing to the required standard. The employee has been issued a first stage warning for performance and their performance is still being closely monitored and managed. The individual s performance rating has been listed as improvement needed on the system for the last two 11

quarters. In the past two weeks, the employee has been disciplined for poor timekeeping, and has received a first stage warning for conduct. In their performance review for the current quarter, their manager will discuss both their conduct and their work performance, and then record their rating as unsatisfactory conduct on MSS. In the paperwork for the meeting, the manager will also need to note that there is an ongoing performance issue. The following quarter, as long as there are no further conduct issues, and if there is insufficient improvement in performance, the manager will record improvement needed on MSS. LOOP employees Performance in the Round An individual who receives a disciplinary warning will be assessed as Did not achieve and will therefore not receive a performance award for that quarter. Depending on the severity of the warning and any improvement in the individual s conduct or performance, the individual may be able to receive a performance award in the following quarter. 2.10 Gross Misconduct The following, whilst not exhaustive, are examples of incidents which may be considered as gross misconduct as these issues fundamentally undermine the basis of trust between the Company and the employee concerned: Theft Fraud Dishonesty and actions such as deliberate falsification of information, Any action which may be in breach of the Gifts Policy held within the Company s Code of Ethics. This could include the giving or receiving of gifts and/or corporate hospitality which may ultimately contravene the Bribery Act, Bribing another person, accepting a bribe, bribing a foreign public official and/or a failure to report suspicions or knowledge of breaches of anti corruption / bribery policies, and/or any other action which may be in breach of the Bribery Act, Interfering with company documents, property or information systems - including the introduction of computer viruses or breach of the Data Protection Act, Gross insubordination the failure to comply with reasonable instructions, Company Policy or legislation, Breaches of health, safety and environmental rules, Negligence, Violent behaviour, harassment, bullying or other conduct either at or away from work which significantly undermines working relationships with managers, colleagues or customers, Any action that may bring the company s name into disrepute, Being under the apparent influence of alcohol which has an adverse effect on your ability to carry out your role (in accordance with the Company s Drugs and Alcohol at Work Policy), Unauthorised consumption of alcohol on company premises, In the possession of, consuming or under the influence of illegal drugs (in accordance with the Company s Drugs and Alcohol at Work Policy), Unauthorised absence without due cause, Acting in a manner detrimental to company interests e.g. disclosure of confidential or sensitive information (except within the scope of the Public Interest Disclosure Act), breach of the company Code of Conduct, 12

Abuse of the Company s time and/or resources, including using the telephone, e- mail, internet and computer facilities for personal use, which contravenes the Company s IT Security Policy, Accessing, storing, downloading, transmitting or otherwise forwarding material that could be considered libellous, racist, sexist or otherwise offensive or distasteful via the Company s e-mail, internet and computer facilities, Covertly recording a meeting or an adjournment without express permission. In all cases, the relevant facts and mitigating circumstances will be taken into account in reaching a decision, but actions amounting to gross misconduct will normally result in summary dismissal. 2.11 Role of person accompanying at the hearing The person accompanying the employee may be a trade union representative or fellow employee. They must not be a witness involved in the particular case and must not have had any material involvement in the case in question. There is no duty on an individual to accept a request to act as a companion and no such pressure should be placed on an individual. Colleagues and lay trade union representatives should be allowed a reasonable amount of paid time off to fulfil this responsibility. The representative (whether a trade union representative or colleague) can address the hearing but does not have the right to answer questions on the individual s behalf unless the representative is acting for the individual in their absence e.g. due to ill-health. They may also confer privately with the individual. Any formal meeting (whether an investigatory meeting or a disciplinary hearing) should be arranged on a convenient date for the Manager, employee and representative. However, if the representative cannot attend on the proposed date the hearing will be postponed for up to five working days from the original date. 2.12 Records of the Meeting Notes will be taken at all stages of the disciplinary process by either a HR representative or a supporting manager. These will be available to employees and their representative after each meeting. Employees and / or their representatives may also choose to make their own notes. Recording devices of any nature will not be permitted in meetings unless prior permission has been expressly given by the disciplinary / investigation manager in conjunction with the Employee Relations Manager. Without such permission, covertly recording a meeting or an adjournment is a disciplinary matter and will be dealt with accordingly. 2.13 Grievances and harassment claims during an on-going disciplinary process If an employee raises a grievance that is related to a disciplinary process, the Company will consider whether to (i) suspend the disciplinary process and/or appoint another manager to deal with the grievance or (ii) continue the disciplinary process. There are a number of possible scenarios: 13

In disciplinary cases where the employee is subject to allegations of harassment and the employee makes counter allegations of harassment, the disciplinary process will normally be suspended until the counter allegations have been fully investigated. Where the disciplinary action taken or contemplated by the company is dismissal, and the employee raises a related grievance, in most cases the grievance will be dealt within the context of the disciplinary process, for example where the grievance relates to the conduct of the investigation. Similarly, where the company is contemplating paid suspension or disciplinary action such as a warning or other action short of dismissal and is conduct or capability related, the grievance will be dealt with under the disciplinary procedure. If the grievance is that the Company s action amounts, or would amount, to unlawful discrimination, or if it is alleging that the true reason for the action is not the reason given by the Company, the grievance will normally be dealt with at the disciplinary hearing and/or disciplinary appeal hearing, unless the disciplinary hearing has already taken place, in which case the grievance will be dealt with under the Company s Grievance Procedure or Dignity at Work Procedure. Any grievances which are not related to the disciplinary procedure will be dealt with under the Company s Grievance Procedure or Dignity at Work Procedure. 2.14 Sickness Absence If during the course of the disciplinary procedure an employee becomes absent from work due to illness, the hearings which they are required to attend (e.g. fact find or disciplinary hearing) should be temporarily postponed until the individual is medically fit to attend or until they have been given reasonable time to arrange for a third party to represent them. In cases where the disciplinary process is the underlying cause of the absence; following a reasonable period of postponement and subject to the consideration of medical advice, the disciplinary process should proceed. 14

2.15 Flowchart of Disciplinary Procedure This flow chart is a summary of the key steps of the Disciplinary Procedure and should be used in conjunction with the detailed procedure Alleged misconduct takes place Consider suspension on full pay e.g. if clear evidence of misconduct exists Investigation Interview - hold investigatory interview (right to representation) - consider suspension in light of the investigation - establish the facts No misconduct taken place No action Grounds for disciplinary hearing Relatively Minor Incident Likely penalty First or Second Stage Dismissal Written Warning Serious incident Likely penalty Final Written or Refer to more Senior Manager Hold formal disciplinary hearing - invite verbally and in writing (min of 2 days notice) - right to representation Outcome No Action First Stage Warning Second Stage Warning Final Warning Dismissal Live for 6 months Live for 12 months Live for 12 months Explain Explain Explain Explain - reason - reasons - reasons - reasons - right of appeal - future expectations - future expectations - future expectations (within 7 calendar - possible action if - possible action if - possible action if days of written further misconduct further misconduct further misconduct notification) occurs occurs occurs - right of appeal - right of appeal - right of appeal Appeal Hearing (normally held within 14 days of receipt of letter) Outcome of Appeal (normally issued in writing within 14 days of hearing) Redeployment 15

PART 2 SICKNESS ABSENCE Index Section 1 Sickness Absence Policy 17 1.1 Introduction 17 1.2 Responsibilities 17 1.2.1 Managers 17 1.2.2 Employees 17 1.2.3 Trade Union Representative 18 1.3 Occupational Health 18 1.4 Company Sick pay 18 1.5 Misconduct 19 1.6 Injury at work 19 1.7 Precautionary Suspension 19 1.8 The Equality Act 2010 19 1.8.1 Definition of disability 19 1.8.2 Examples of physical and mental impairments 20 1.8.3 Duty to make reasonable adjustments 20 1.8.4 Access to Work 20 Section 2 Short Term Absence Procedure 21 2.1. Persistent short term absence 21 2.2 Identification of short-term absence issues and Informal Counselling 21 2.3 Formally managing sickness absence 21 2.3.1 Stage 1 Review Meeting 22 2.3.2 Stage 2 Review Meeting 23 2.3.3 Stage 3 Review Meeting 23 2.3.4 Stage 4 Review Meeting 24 2.4 Ongoing monitoring/review 25 2.5 Right of appeal 25 2.6 Pay for Performance 26 2.7 Summary of short term absence procedure 27 Section 3 Long Term Sickness Absence Procedure 28 3.1 Introduction 28 3.2. Managing long term absence 28 3.3 Terminal Illness 29 3.4 Facilitating a return to work 29 3.5 Termination of employment 30 3.5.1 Referral to Occupational Health 30 3.5.2 Formal Review Meeting Line Manager 31 3.5.3 Case Review 31 3.5.4 Employment Review Meeting - Senior Manager 31 3.6 Right of appeal 32 3.7 Summary of Long Term Absence Procedure 34 16

SECTION 1 - SICKNESS ABSENCE POLICY 1.1 Introduction The management of sickness absence is vital if managers are to fulfil their strategic objectives and maintain customer service. It is recognised that people will be ill from time to time, however, the cost of sickness absence and the impact on our customers and colleagues needs to be minimised as far as possible. Managers therefore need to balance business requirements with the individual circumstances. 1.2 Responsibilities 1.2.1 Managers Must ensure accurate records of all periods of absence for people in their team are either input into MSS or reported to the relevant department. This not only ensures accurate monitoring at both individual, unit and company level of absence levels, reasons for absence etc. but also gives the essential data and evidence to allow managers to take action where necessary and to recognise good attendance. Detailed absence data (for example: reasons for absence) is classed as personal sensitive data and must therefore be recorded, stored and processed in accordance with the terms of the Data Protection Act. Managers are responsible for the day to day management of absence including fair, reasonable and consistent application of this policy and supporting procedure. They are responsible for minimising absence levels within their areas of responsibility by: identifying instances of regular, intermittent and high absence; taking appropriate action in accordance with this policy; developing safe systems of work and working environment which help to minimise absence including well designed jobs. Managers must take appropriate action for persistent short term absence. Long term absence cases should initially be managed by keeping in regular contact with employees whilst off work. In cases of long-term absence the Manager will be required to liaise with Human Resources and the Occupational Health Unit. Additionally, managers should manage the return to work. This may include making adjustments, as appropriate, to ensure the requirements of The Equality Act (2010) are met, for example; changes to workstations or working environment. For more information see Para. 1.8 below. It is important that managers conduct a return to work discussion with the individual after each period of sickness absence. This should take place, where possible, within 2 days of the return to work. This allows a manager to welcome employees back to work, update them on business issues, assess whether they are fully recovered and able to perform normal duties, assess if any further support is needed, review recent absence history and remind the individual they were missed and the impacts absence has on the business. 1.2.2 Employees To help ensure that the company achieves its business objectives and a safe and healthy working environment is maintained, it is important that all employees fulfil the following obligations:- Maintain good health and fitness for work and attend work when they are fit to do so. 17

Phone in and speak to the relevant person within an hour of their normal start time on the first day of absence and keep in touch with their manager at agreed intervals thereafter. Maintain MSS records with periods of sickness absence on return to work (for absences up to 7 days) (This is not applicable to LOOP) Provide a doctors certificate for periods of absence of 8 or more calendar days Co-operate with the Occupational Health Specialist and Occupational Health Team to facilitate overall management of the situation. Refrain from undertaking any activities during their absence that may impede or impact on their rehabilitation and recovery. Return to work when they are fit to do so Report any work related illness / accident immediately to their manager and follow the Company Accident Reporting Procedures Promptly complete and return consent forms to enable the Company to obtain relevant medical reports from the employee s GP or from a specialist. 1.2.3 Trade Union Representatives Have a responsibility to understand and support the company s objectives and in representing their members to ensure consistency in their approach and compliance with the company s agreed procedures. 1.3 Occupational Health At any time the company may require an individual to see a member of the Occupational Health Team ( occupational health nurse or physician). In addition there may be occasions when it is necessary for the Occupational Health Team to seek an individual s permission to obtain a medical report from their own GP or from a specialist involved in their medical treatment/care This is to enable the occupational health team to help the manager to get a clear understanding of: an individual s health / condition, how it is impacting on their ability to work and whether there is anything the company can do to support the individual in their current role or back to work if they are absent. The medical reports received from Occupational Health may also be taken into account when making decisions about an individual s future employment. Individuals may independently approach Occupational Health at any time, without a referral from their manager. The content of these conversations will remain confidential between the individual and Occupational Health. If an individual does not co-operate in providing medical information, they should be made aware that the company will have to consider their case and this could include a decision such as whether or not their employment should be terminated, on the basis on the information available. 1.4 Company Sick Pay If an individual is unable to work as a result of sickness or injury, they are entitled to receive occupational sick pay in line with company sick pay provisions. Occupational sick pay is a benefit provided by the company and intended to provide financial help to those who are unable to work due to sickness. The company reserves the right to withhold an individual s sick pay entitlement should they fail to co-operate with the company absence procedure or legal provision governing eligibility for Statutory Sick Pay (SSP). 18

1.5 Misconduct Whilst this policy is not a disciplinary procedure, it may be necessary in some cases to take disciplinary action. For example, claiming occupational sick pay or SSP fraudulently is a dismissible offence if the company has reasonable grounds to believe that sick pay is being claimed in circumstances where an employee is fit to work. These matters would be dealt with under the disciplinary procedure. In addition to withholding sick pay (as outlined in 1.4), an individual s failure to comply with their obligations under the sickness absence policy, could lead to their absence been treated as unauthorised. This is a disciplinary offence and will also be dealt with under the disciplinary procedure 1.6 Injury at work All accidents and any physical injury, however slight, which occur during the course of someone s employment, must be reported immediately to an individual s manager and the company accident reporting procedures must be followed. 1.7 Precautionary Suspension Suspension may be used when the continued presence at work could be prejudicial / detrimental to the health of the employee or other employees. The company has a duty of care to all employees under the Health & Safety at Work Act 1974 and its regulations and approved codes of practice. Any period of suspension under the Sickness Absence Policy will be paid at full pay and will not be treated as a disciplinary sanction. The employee should be advised verbally and then in writing of the suspension. The letter should detail any restrictions or obligations required of the individual during the period of suspension. The period an employee is placed on suspension should be kept to a minimum and should be regularly reviewed, while further medical advice is sought and / or adjustments made to the work place / role. Throughout the suspension period, it is important that the line manager maintains regular contact with the employee. Before suspending an employee, the manager should consult the Employee Relations Manager and inform the appropriate trade union official. 1.8 The Equality Act 2010 ( the Act ) The Act makes it unlawful to unjustifiably discriminate against an individual on the grounds of his/her disability in relation to recruitment, promotion, training, benefits, terms and conditions of employment and dismissal. It also requires employers to make reasonable adjustments to ensure employability of individuals who meet the definition of disabled under the terms of the Act. In particular this can have an impact on how sickness absence cases can be managed. It is important therefore that managers seek appropriate specialist advice from HR and Occupational Health when an illness is identified to ascertain any implications of the Act. 1.8.1 Definition of a Disability The Act states that a person has a disability if he/she has a physical or mental impairment which has a substantial and long term adverse effect on his/her ability to carry out normal 19